JG Summit net profit surges 63% to ₱31.3 B

JG Summit Holdings, Inc., the flagship of the Gokongwei group, reported that its net income surged 63 percent to ₱31.3 billion in 2019 due to stronger core income as well as one time gains.

In a disclosure to the Philippine Stock Exchange, the firm said profit includes the impact of mark- tomarket and foreign exchange gains totaling ₱1.5 billion, plus its share in United Industrial Corporation Limited’s gain on acquisition and JG Summit Petrochemical Group’s (JGSPG) impairment loss reversal.

Excluding one-time gains, core net income after tax amounted to ₱25.3 billion, up 13 percent yearon-year due to margin improvements in its airline, banking and food subsidiaries.

Overall topline increased by 3 percent to ₱301.8 billion in 2019 driven by robust passenger volumes and better yields and higher ancillary revenues in its airline business.

Revenues were also boosted by wider net interest margins (NIM) and trading gains in its banking unit; as well as its ₱3.0 billion share in UIC’s gain arising from its acquisition of additional shares in Marina Centre Holdings and Marina Mandarin Hotel.

These were tempered by slower growth in the international branded consumer foods (BCF) and agroindustrial and commodities (AIC) divisions as well as lower sales volume and average selling prices in its petrochemicals business.

“Coming from a very challenging 2018, we saw a strong recovery as JGS posted a significant earnings expansion in 2019 driven by our core businesses in food, air transport and banking.” JG Summit President & CEO Lance Gokongwei said.

He added that, “Our plan is to sustain this growth in the coming years as we have clearly laid out our strategic priorities leveraging on the strength of our group ecosystem while at the same time drive focus in strengthening our organizational and people capabilities – accelerating digital transformation, embedding a customer-centric culture and adopting global best practices in enterprise sustainability.”

Universal Robina Corporation (URC) posted a 7 percent improvement in net income to ₱10.1 billion, driven by the growth in operating income offset by finance cost, other expenses, and adverse foreign exchange impacts.

Net sales amounted to ₱134.2 billion, a growth of 5 percent versus same period last year. Operating Income (including hogs market valuation) grew by 12 percent to ₱15.0 billion, with margins improving by 72 basis points versus last year.

Sales of domestic and international branded consumer foods contributed to ₱105.9 billion. Domestic revenues increased by 8 percent, while operating income pivoted back to growth of 12 percent versus last year.

International revenues increased by 2 percent on a constant currency basis, but declined by 2 percent in peso terms to ₱42.2 billion due to negative impact of foreign exchange translation.

International operating income, on the other hand, still grew by 8 percent versus last year as margins expanded by 89 bps given the continuous recovery in Vietnam.